Analyst: Recession could affect PS3 sales the most

by Andrew Yoon { Nov 18th 2008 at 9:29AM }

What happens when people are reluctant to spend money? Well, they're reluctant to buy a $400 games machine, that's what. As reported yesterday, Blu-ray predictions are down due to the struggling economy. PS3 sales should also be affected, an obvious conclusion made by analyst Piers Harding-Rolls. "At the top end, the PS3 with its high price is arguably more likely to be impacted by a recession than the other platforms. This may prompt consumers to consider other consoles or wait for the PS3 price to drop."

But, sluggish sales of the PS3 won't be the only outcome of a recession economy. Credit has dried up in many areas, meaning developers of games may be forced to cancel or stall projects, before funds become more readily available. "Where I do see an impact is with regards to access to credit for publishers that look to borrow to invest in content production. Obviously credit is less available generally so this may result in cost cutting and some projects being canceled and put on hold."

Of course, when developers and publishers can't try something new, you know what they turn to: less original IPs as investors become increasingly wary of games with ambiguous potential.

Tags: analyst, ps3, recession, sales

Reader Comments (Page 1 of 1)

ocdog45 @ Nov 18th 2008 9:44AM

crazy. Makes sense, but it will effect those crappy games IMO.

Cygnoid @ Nov 18th 2008 9:40AM

Reportedly, analysts postulate that, conceivably, the current state of affairs could arguably harm PS3 sales the most.

rvkremer @ Nov 18th 2008 9:53AM

I hate to see anybody be negatively impacted, but if the economy does anything to gaming, let's hope it makes companies kill Wii shovelware projects and refocus on fewer better quality titles.

I worry the opposite will happen, though.

Neon @ Nov 18th 2008 10:07AM

Unfortunately I think that this will be better for shovelware. It's cheaper to produce and yet you still make a profit...

acedoh @ Nov 18th 2008 9:57AM

I think the gaming industry will continue to grow. SONY won't do as well without a price drop but their numbers will still be good. Consumers in North America and Europe use gaming as a getaway in tough times and that is helping the industry grow despite slowdowns just about everywhere else. SONY can only help themselves with a price drop...

Devin @ Nov 18th 2008 10:06AM

I think Sony will post good numbers, but nothing that they were predicting. Sadly, most consumers won't do their hmwk to see that they are getting a great deal on a $399 PS3 in the long run, but rather see that initial $199 Arcade instead.....

Wes @ Nov 18th 2008 11:52AM

Did you say Sony will still post good numbers? I highly highly doubt it. They just recently released that profits were down 75% resulting in the lowest stock market price in eighteen years? I think the article on engadget said?

Regardless, most numbers Sony has been posting have been overall to a discouraging nature to stock holders. They did do a nice spin on their sales figures for Q3 indicating they have increased sales by 50% over last year, but, that just puts them at where the xbox 360 sales were last year. Sony's sales were so poor by comparison last year, a 50% increase don't even come close to what the xbox 360 sales are pulling now.

It doesn't take a genius or an analyst to tell you that the PS3 desperately needs a price cut which Sony economically cannot afford to provide without creating losses the company cannot withstand for too long for fear of losing investor confidence further.

Chainblast @ Nov 18th 2008 5:37PM

I think if Sony can properly promote the PS3 a continued downward economic trend might help it. Sure it costs more, but it also does more. At a time when people may not want to travel as much, having all your entertainment needs in one box is pretty enticing. Maybe I'm being too optimistic that the general consumer is not so oblivious.

That said they do need a price cut and I have a really bad feeling we'll get one at the cost of free PSN. Despite what some will say, Microsoft does the exact same thing with XBL, and it works.

Christian @ Nov 18th 2008 10:07AM

Bad economic times could also open peoples eyes to the cost savings the PS3 provide as a all-in-one device. So instead of buying a Game console, a blu-ray player, a media center solution and a PVR, they just get a PS3 :)

Kspraydad @ Nov 18th 2008 10:09AM

Although I agree on the value you are relying on the EB Games/ Walmarts / Best Buy's of the world to make that argument...ain't gonna happen.

ferrarigtc @ Nov 18th 2008 5:48PM

If you don't have a HDTV then I can't see the justification of paying a extra $200 for a blueray player. I can't tell you the amount of friends I have that couldn't tell the difference between component cables and RCA anyways. I always get a kick when I go to their houses and see these new 50" LCD's and plasma's with PS3's hooked up via RCA because Sony was too cheap to include components and my friends are not techy enough to care or tell the difference. This brings be back to the average consumer. The average consumer will not browse the internet on a ps3 nor will they use it as a media center or a Linux box. The average consumer wants a easy to use gaming device that is cheap and has a good library of titles. I have all three systems and I can tell you the 360 achieves this while also getting the most use from myself. With the incorporation and ease of use of Netflix and the Windows Media Center the average consumer can easily operate a XBOX and stream media no problem. No I am not a Xbox fanboy, I waited to buy a PS3 as I loved PS2 (even had one sent over from Japan during release) but they kept on delaying it so I bought a 360, then a Wii and eventually a PS3 for MGS4 and GT5 Prologue. Somehow my favorite PS3 game is Little Big Planet......A game I never even heard of 6 months ago..Go Figure

rgoff31 @ Nov 18th 2008 10:13AM

Sony knows whats going on, they have to do a price cut, extra games bundles, etc.. for Black Friday.

Arnon @ Nov 18th 2008 11:26PM

You don't realize that they cant afford a price cut.

rgoff31 @ Nov 18th 2008 11:58PM

I know they sell the PS3s at a loss already. If they don't move any of the games because they don't have enough installed units they will never turn a profit.

MATT @ Nov 18th 2008 10:22AM

Come on Obama, save the PS3!

ryan @ Nov 18th 2008 11:31AM

*Stock Market plummets another 14% after reading that comment*

Greg @ Nov 18th 2008 6:11PM

Matt and Ryan-best two comments of the day! Thank you for that, because the earlier part of my day was pretty crappy.

Galley @ Nov 18th 2008 10:23AM

Interesting, I've got two friends who are finally ready to jump on the PS3/BD bandwagon.

Kspraydad @ Nov 18th 2008 10:26AM

Over the year I've owned one I've had 4 people decide it was the choice for them after seeing all it could do.

SaMav @ Nov 19th 2008 4:47PM

And over the year that i have owned one... my best friend traded in his 360 to get one, which inevitably led to my roommate getting one, another friend to get one and now just recently our lesbian co-worker just got one.

ryan @ Nov 18th 2008 11:29AM

I think they will be fine, they do still rely on PS2 and PSP sales to help keep them afloat. The signs of the times are that people want entertainment affordable.

There's nothing more affordable than a PS2 that can play cheap DVD movies and games like God of War 2 among the many other solid selections from the PS2 library. And if you are the traveling man, the PSP is always a great companion to bring alongside your DS.

PS3 will probably not be flying off the shelves until the economy goes up or the price goes down. But it will still do okay I think.

Dan Rabot @ Nov 18th 2008 10:25AM

It would suck to see a price drop, being as though we've all paid full whack, but it would help the sales.

Only problem is that the price really reflects how much better the PS3 is than the Xbox, i feel that dropping the price will make people think of them as the same grade of console, which is not the case.

Think Adrian @ Nov 18th 2008 10:28AM

I think people just are reluctant to buy a Blu-ray drive because they already own a DVD or three, which to many users have enough quality and ease of use.

A PS3, however, is a game machine and christmas is just around the corner.

Hife @ Nov 18th 2008 10:32AM

Well that's amazing considering that just a few weeks ago analysts were telling us that the recession would boost video game sells.

Lesson? Don't listen to analysts.

Pausanius @ Nov 18th 2008 10:56AM

I believe the analysts are still sticking to that overall, recessions continue to help video game sales as people search from an escape from the harsh realities from life (similar to how movie-watching tends to go up a bit too).

I think this analyst is arriving at his conclusion based upon two different points -- in hard times, people are more willing to look at competition and going for the lower pricepoint -- and second, a significant amount of people continue to buy the PS3 as a Blu-Ray player first and foremost (some ignoring the gaming side all together) which is a luxury that can be passed over in a recession. In other words, the 'escape' mentality doesn't apply for the second group.

*my apologies if this is redundant... for some reason, PS3fanboy comment system doesn't seem to like my posts.

sach92 @ Nov 19th 2008 8:33AM

maybe they ment boost sales for other consoles?

Hife @ Nov 19th 2008 10:30AM

Well, both of your points are well taken, but I think my comment was a little too ambiguous. So, to elaborate... when the recession started, analysts predicted home entertainment industries would benefit, because that's how it's always worked in the past. Then the new sales numbers come out, and PS3 didn't do so hot. Naturally they have to amend their old prediction to explain that.

Point is, analysts are like weathermen. If absolutely NOTHING unexpected happens, there's about a 50% (just making that number up) chance they will be right. But of course, something unexpected always happens.

Jon Acheson @ Nov 18th 2008 10:36AM

I could see a lot more small games being made for the Playstation Store, rather than multimillion-dollar fullscale games.

I could also see prototypes of games being released on the Playstation Store as proofs of concept, to be expanded and released as full games on disc if the market responds positively. Less initial investment needed, so less risk.

rbbrdman @ Nov 19th 2008 11:18AM

Wow didn't really take a brainiac to figure out that the most expensive console would be the hardest one to buy?

Captain Obvious to the rescue!

Kruegmeister @ Nov 18th 2008 12:13PM

If you need wireless for your 360 and a HardDrive the Price is really the Same as the PS3.

Then if you add in $50 a year for XBox Live then the 360 really costs more money. 5 years is $250.

Additionally if you want separate buddy lists for more than one user on the 360 that Live Price Doubles... $100 a year so more than one person can play online and have buddy lists... That is a bit much.

I have one XBox Live account and my Son and my Friends cannot tell if it is me or him when we are on the 360.

On my PS3 I have 11 PSN accounts.
This allows all of our Friends to come over and Play Little Big Planet and Keep their Costumes and Stickers. The cost of these 11 PSN accounts... $0.

It is the Perception of the 360 being cheaper that may hurt PS3 sales... Most Moms buying for little Johnny do not realize all the Hidden costs they will run into when they choose to go with the 360.

ryan @ Nov 18th 2008 12:35PM

It's a good thing that people usually get paid more often than they have to pay for LIVE otherwise we'd be looking at $250 five year plans when purchasing a 360 day one.

And that tacked onto a $199 console is pretty scaring.

But, over a period of time with the choice of not renewing your subscription plus various deals around the internet ($38 for 13 months on newegg.com), yeah, it doesn't seem as damaging as you make it out to be.

BTW, you do have the choice of masking your online appearance so you don't have to interact with your son's friends. Just a tip for those awkward "Billy is that you or your dad" moments. :D

Sackolantern PSN ID: johnnynumber5 @ Nov 18th 2008 2:23PM

Ryan misses the point. :sigh:

I'm pretty sure that most of the moms and dads buying these consoles for their kids aren't going to buy the console at best buy and then go to new egg for a better deal on a Live subscription. The 360 has more hidden cost than the PS3. If you buy a PS3 you get everything in the box that day so you can play. If you buy a 360 it's possible you will need to upgrade to a wireless adapter (I did), bigger proprietary HDD (I did) & of course Live just for the pleasure to play your games online (I did). Not to mention if you want a wireless headset (I did), messenger chat pad (I did) and rechargable battery packs (I did). The biggest shit kicker was buying that external HD DVD drive (I did as well) for my next gen movie fix when there was an on-going format war.

In contrast, your PS3 SKU has it's wireless built in, all controllers are rechargable, you can use any blue-tooth headset, you can use any USB or bluetooth keyboard, you can put any laptop sized HDD ( I got a 250 Gb HDD for $79.99), your online play is completely free, you have a fully flash supported web-browser and built in Blu-Ray.

Why would i want to pay for Netflix when I can simply stream any movie or TV show on my PS3 for free.

People love to rationalize the cost of a Live subscription by saying it's on pennies a day or a few bucks a month but over the long haul that money adds up to be allot. I would prefer to own 1 extra game a year instead of paying for an online service I get for free on the PS3.

I have an 360 and when i went to sell it recently my trade in value was only a pitiful $80.00. This is due to all the price drops on the 360. The thing is not even worth selling at this point. Just going to use it for a DVD player, HD DVD player and Gears Of War 2 machine until it craps out on me again. It's happend 6 times already so a 7th isn't out of the question.

Kspraydad @ Nov 19th 2008 12:13AM

Whoa...what?

Live is per MEMBER and not per MACHINE? Holy crap..that'd be $160-200 per year in my house!

That is awful.

Kevin @ Nov 18th 2008 12:42PM

i never comment on anything , but if Sony had focused it money on digital download or left out the blu-ray part from its console then maybe they could afford a price cut .the thing i find funny is when & if digital download becomes the normal does Sony still expect people to by their four hundred dollar blu-ray player/ console . or will they make the next console with out it & realize how much money they would have saved .

ryan @ Nov 18th 2008 12:47PM

They better ship their next console with a ginormous HDD if they want to go the DD route. Otherwise I think a physical copy will always be more convenient, even if titles like Siren and Burnout Paradise were considered successful DD titles.

alex @ Nov 18th 2008 3:55PM

@23 sigh right bak at ya....
Funny I bought the arcade version $200 + Live subscription $60 w/headset and GOW2 $60. I spent $350 after tax and am having a blast playing a great game. You on the other hand will have to spend $399 + $60 to play LBP. (also a great game) that is $475 after tax to play a good game. Stop fudging the numbers for the 360. Even if I was to buy the pro series that came with HD at $299 it is still much cheaper than your option. Stop trying to justify Sony ripping you off by making people feel bad about spending less to get a true gaming system not a Blu ray player disguised as a gaming system.

kentuckyfried @ Nov 18th 2008 4:08PM

Now more than ever, Sony's marketing and advertising teams need to saturate the t.v. and radio with ads. Sony just doesn't have enough presence right now in the media. They've not been doing a good enough job to highlight why it is that people can justify paying a higher price up front for the ps3 as opposed to a 360.

Unfortunately, although LBP looks good and has been getting good reviews, I don't think it's the killer app that sends droves of people to buy this machine (as wii sports did with that console).

iamkid @ Nov 18th 2008 10:58PM

they need to make so many more commercials, i agree. i did see a new one the other day, however, but it didnt really inspire me. it was just this kid looking in awe while a faded ratchet & clank scene was playing on the side, then it showed a ps3 :/. those 360 ads are most definately making an impact, seeing as ive seen them on nearly ALL multiplat games. that just kinda annoys me that they act like the game is only on their console...

JaseH @ Nov 18th 2008 6:11PM

Well there was a recent national poll here in Australia, indicating that people will spend more money this Christmas than last year.

I'd call this Analyst an analist. Bunch of bullshit.

______________________
JaseH.

iamkid @ Nov 18th 2008 10:55PM

at least gaming is defying the recession(so says gamepro). they just did an article the other day saying game related sales in october were up 17% from last year october.

Frank @ Nov 19th 2008 12:13AM

blu-ray will succeed when movies are $20 instead of listing for $35. Make the software a great deal and people will spend, and hardware will move.

Now I would easily rent HD for $5 as opposed to spending more than $30...but if the movies were $19.99 I would be more inclined to just purchase many.

Yes they are losing income to HD downloads..so now they actually have to compete...step one..$20 movies..

poo poo consile @ Nov 19th 2008 10:31AM

Haha...Sony are gonna go bust. You heard it here first.

Dan Rabot @ Nov 19th 2008 11:31AM

Sony needs to release an "Arcade" PS3.

Tiny HDD
Non charging controllers
No card readers
Paid for Optional PSN
Optional External Wifi unit
Cheap Blu ray drive (which will last one year and one day)

Just to grab those uneducated (in current gaming tech) parents who are going to go for the cheap Microshaft option this Xmas and who will be stuck with unhappy kids who can't play online, can't fill up their console with tunes and videos and need new batteries for their controllers every week!

It's such a shame that by only offering the best and incorporating all the features in their machine Sony are losing out to a company that is literally trying to DUPE parents into buying theirs.

PS3 is more than a gaming console. X360 is barely a gaming console in comparison.